Few Prosecutions Show Anti-Financial Crime Regime Works


Deputy Prime Minister Peter Turnquest.


Tribune Business Editor


The Deputy Prime Minister is arguing that The Bahamas has relatively few money laundering prosecutions because its regulatory regime is successfully deterring financial criminals.

Flipping a key aspect of the Financial Action Task Force's (FATF) rationale for branding The Bahamas one of 11 nations with "strategic deficiencies" in their anti-money laundering/counter terror financing regimes (AML/CFT), KP Turnquest said the few prosecutions should be seen as a strength and not necessarily a weakness.

Addressing a Caribbean Regional Compliance Association conference in Barbados, Mr Turnquest said: "Now, I'm not disputing that there is continued work needed to be done to improve the effectiveness of our enforcement measures - The Bahamas has recently amended its Proceeds of Crime Act and the Financial Transactions Reporting Act to bolster supervisory enforcement capabilities.

"I would contend that the fact that there have not been a large number of AML/CFT related prosecutions could be because our measures are working effectively at the front end. That is only my view, of course. It would appear, however, that the more we comply with the rules, the more they find novel ways of determining that our compliance is deficient."

Among the seven areas that the FATF, the so-called global standard-setter on financial crime, wants The Bahamas to address are proof that the authorities are "investigating and prosecuting all types of money laundering, including "complex" money laundering cases, stand-alone money laundering, and cases involving proceeds of foreign offences".

It also wants The Bahamas to show asset "confiscation proceedings are initiated and concluded for all types of money laundering cases", with many of its concerns relating to execution issues and a desire to see evidence that this nation is implementing its anti-money laundering/counter terror financing regime in practice.

Carl Bethel QC, the attorney general, recently told Tribune Business that money laundering prosecutions had increased 40-fold over the 14 months to end-September 2018 - having risen to 40 from just one in the prior period.

Mr Bethel, referring to statistics issued in a statement from the Attorney General's Office, said 19 of these cases had resulted in convictions, thereby meeting the FATF's demand that The Bahamas prove it is "investigating and prosecuting all types of money laundering".

Mr Turnquest, echoing a similar theme, said in his address to the Association that The Bahamas had shown "quantifiable progress since 2015" - the date of its last evaluation by the Caribbean Financial Action Task Force (CFATF), whose findings the Paris-based parent has relied upon to justify its recent action.

"Between 2016 and 2017 there was a 46 percent increase in the number of suspicious transactions received, and a 69 percent increase in the number of cases sent to the Royal Bahamas Police Force," the Deputy Prime Minister said. "We opened 115 more cases in 2017 than we did in 2016. That's a 131 percent increase in the number of cases that were under active analysis.

"Finally, between 2015 and 2017, suspicious transactions that were analysed and reported closed by our Financial Intelligence Unit represented between 35 percent and 60 percent of all cases received. In one complex case, involving $3 million euros worth of laundered money, the Government of Argentina publicly commended The Bahamas for the effectiveness of its international cooperation."

Mr Turnquest said The Bahamas was also waiting on the European Union (EU) to confirm whether planned legislation satisfied its concerns over economic substance (physical presence) and an end to so-called 'ring fencing'.

"To address the EU's concerns on the absence of substance requirements and the elimination of preferential exemptions, we have drafted the Commercial Entities (Substance Requirements) Bill, 2018 and the Removal of Preferential Exemptions Bill, 2018, respectively," he added.

"Both Bills are currently being reviewed by the European Union to ensure that they adequately remediate the areas of concern. We anticipate that they will be enacted in November."

The Government's efforts to protect the financial services industry and The Bahamas' reputation were yesterday backed by Chester Cooper, the Opposition's deputy leader, who agreed that the FATF and EU initiatives represented "a constant threat to the livelihood of thousands of Bahamians".

He added: "They seem to have had The Bahamas in their sights for some time as they continue to unevenly apply punitive measures related to issues of anti-money laundering and taxes to our country's financial services sector.

"In fact, from numerous evaluations conducted on onshore financial centres, significant deficiencies in their anti-money laundering regimes have been found without any punitive measures being taken. It is also documented that the most egregious cases of money laundering and terrorist financing have taken place in onshore financial centres of OECD member countries.

"Therefore, the protectionist nature of the punitive measures taken against international financial centres such as The Bahamas is compounded by the fact that most of the countries subjected to punitive measures are non-members of the OECD, despite The Bahamas in particular having been responsive in addressing these threats against our sovereignty for years on end."


ThisIsOurs 1 year, 8 months ago

OR... officials could be paid or given some other incentive to look the other way...just saying, the statement is disingenuous. For example prior to 2013, we had one gaming boss brought before a court, does than mean that illegal gaming wasn't prolific?

And money laundering can take place anywhere, a doctors office, a foodstore, a music concert, a wash house, any business that takes in money can be used to launder money.


bogart 1 year, 8 months ago

FEW,,,,???????......the Attorney General just finished saying ........increased by some 40 fold pprosecutions.


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